Menu
Infosys' revenue rises, but margins are under pressure

Infosys' revenue rises, but margins are under pressure

Salary increases cut into margins at Infosys in the third quarter

Indian outsourcer Infosys saw profit decline even as revenue grew in the third quarter, as a result of an increase in salaries and a provision for a visa investigation in the U.S.

The company reported revenue of US$2 billion for the quarter, up 15 percent from the same quarter a year earlier under IFRS (international financial reporting standards). But net profit was down 11 percent year on year at $383 million.

Infosys also set aside $35 million in connection with a possible civil resolution of a visa issue with U.S. authorities.

The company has forecast revenue growth of 9 percent to 10 percent for its fiscal year ending March 31. It had earlier cautiously forecast revenue growth in a broader range of 6 percent to 10 percent. While overall discretionary spending by customers is muted, there are some growth markets including cloud-related deployments, CEO S.D. Shibulal said in a conference call Friday.

Infosys' revenue in rupees was up 31.5 percent, while profit grew 1.6 percent, in part because of the fall of the Indian rupee against the U.S dollar by about 11 percent in the quarter.

The Indian outsourcer's performance has been trailing that of its larger rival Tata Consultancy Services for a number of quarters, leading the company's co-founder and first CEO, N.R. Narayana Murthy, to return as the company's executive chairman in June.

Murthy was chairman and CEO of Infosys from its founding in 1981 to 2002, and remained as chairman until 2011, when he was appointed chairman emeritus, largely an honorific position.

The company has also seen in the last quarter the exit of some key executives, including Ashok Vemuri, a member of the board and head of its Americas business. North America is the largest market for Infosys, accounting for 61.5 percent of revenue, followed by Europe with 24 percent of revenue. The company has a strong leadership cadre to cope with these changes, Shibulal said.

The company added 2,964 staff in the quarter, taking the total to 160,227.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags outsourcingbusiness issuesservicesfinancial resultsoffshoringinfosys

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments